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Kodak shares plunge after U.S. blocks $765 million loan deal

Stock Markets Aug 10, 2020 02:25PM ET
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© Reuters. FILE PHOTO: A worker cleans a Kodak booth at the Las Vegas Convention Center in preparation for 2019 CES in Las Vegas
 
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(Reuters) - Shares of Eastman Kodak Co (N:KODK) fell about 40% on Monday and were on track for their worst single-day decline after the U.S. government blocked a $765 million loan to the company, which was going to make drug ingredients for use in possible COVID-19 vaccines, because of "alleged wrongdoing" by executives.

The U.S. International Development Finance Corp (DFC) was slated to grant the loan to Eastman Kodak, which is looking to move deeper into the pharmaceutical arena.

But alarms were raised after senior Democratic lawmakers asked federal regulators to investigate securities transactions made by the company and its executives around the time it learned it could receive the government loan.

U.S. President Donald Trump said last week the government would investigate the circumstances surrounding the announcement of the loan.

"Recent allegations of wrongdoing raise serious concerns," U.S. International Development Finance Corp (DFC) said late on Friday in a tweet.

The company's shares have soared more than five-fold, with retail traders on the popular Robinhood trading app piling into the stock since DFC announced it would sign a letter of interest to provide the loan to the company.

More than 900 million shares have exchanged hands since the loan announcement, nearly 12 times the company's outstanding shares.

Shares of the company were down 39.50% at $9 in pre-market trading on Monday.

Kodak shares plunge after U.S. blocks $765 million loan deal
 

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Comments (9)
Matt Kay
Matt Kay Aug 10, 2020 2:58PM ET
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This was a nice pump and dump scheme.
Viking Prank
Viking Prank Aug 10, 2020 2:30PM ET
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I feel bad for the people that bought into the hype at 60 a share
Tom Jones
Tom Jones Aug 10, 2020 2:30PM ET
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I don’t. Any experienced investor knew this deal had bad optics from the moment it was announced. This is a perfect example of how inexperienced money acts. There was plenty of time to get out of this garbage last week as news of mgmt manipulation began to circulate.
Dennis Cromwell
Dennis Cromwell Aug 10, 2020 11:52AM ET
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Was that a Kodak moment?   Only old farts will get it...
Dan Mej
Dan Mej Aug 10, 2020 11:35AM ET
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They will get crush with tomorrow earnings as well. I don't understand why they can't do things the right way. If the loan does not get approved a lot of people will lose their money. Robbery, the rich keep getting rich!
dave knight
dave knight Aug 10, 2020 10:50AM ET
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just like the us government paid to shut 30% of chk wells then filed bankruptcy at the lesser value to ****American shareholders for rich profits again.judge jo es in Houston will play along with trump. regardless of the law.
Lisa Johnson
Lisa Johnson Aug 10, 2020 10:24AM ET
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When I found out Trump was singing praises for the vaccine going through these guys, I backed out quick.
DJ Ryte
DJ Ryte Aug 10, 2020 10:24AM ET
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Seems with some, no good deed to help America goes unpunished. At least quick action has been taken to investigate the corruption.
Gamer Turtle
GamerTurtle Aug 10, 2020 9:58AM ET
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everyone made money walk free. outright robbery is typically forgiven when done correctly. lol
Pdro Mchn
Pdro Mchn Aug 10, 2020 9:53AM ET
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what a nice way to scam and steal ppl's money.
Jurgen Daub
Jurgen Daub Aug 10, 2020 9:53AM ET
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you are on the stock market, whatelse would you expect?
Kevin Dixon
K9US Aug 10, 2020 9:52AM ET
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They got greedy!
 
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